Wendy's improves as Arby's lags in 4Q

Wendy’s/Arby’s Group Inc. posted a net loss of $393.2 million for its fourth quarter, as impairment charges and continued slow sales at the Arby’s chain weighed down results.

The parent company to both the Wendy’s and Arby’s chains reported on Monday improving sales trends at Wendy’s, but weak results at Arby’s, which led one analyst to call the Arby’s business “a key swing factor” to a corporate turnaround.

Wendy’s/Arby’s Group, which was formed last year after Arby’s parent Triarc Cos. Inc. purchased Wendy’s parent Wendy’s International Inc. in a $3 billion-plus deal, said sales at the Arby’s sandwich chain were hurt by competitor discounting, specifically citing the $5 promotions at Subway. Arby’s posted a systemwide same-store sales drop of 8.5 percent for the quarter ended Dec. 28. Officials said it would look to drive sales with its new Roastburger sandwich line, introduced last week, as well as new roasted chicken, shakes and iced fruit teas. The chain also will test value-priced products, which officials did not detail.

“Arby’s experienced a difficult quarter as fast-food consumers shifted spending to value meals and deeply discounted sandwiches,” said Roland Smith, chief executive at Wendy’s/Arby’s. “Our sandwich category competitors continued to focus on $5 price points, which are below Arby’s average check of about $7.50.”

The negative sales trends, coupled with “the deteriorating economy and adverse stock market conditions,” drove the company to take a non-cash impairment charge of $460.1 million against Arby’s corporate restaurants. Arby’s system includes 1,176 corporate locations and 2,580 franchised units.

Press release Wendy's Arby's